If both money demand and commodity demand are unstable,as many activists believe,which type of policy target would most likely lead to a stable economy? (assume no supply-side shocks,and a fixed price level)

Question

Quizplus · Accepted Answer

If both money demand and commodity demand are unstable, targeting any of these three variables (money supply, real GDP, or interest rates) may not lead to a stable economy. A more effective approach would be to focus on addressing the root causes of the instability in money and commodity demand, such as through structural reforms, regulation, or other policy interventions. Thus, none of the above choices would be the best option.

If Both Money Demand and Commodity Demand Are Unstable,as Many